And the walls came tumblin’ down
NEW YORK — Wall Street tumbled again Monday amid a rout in global stocks after rating agency Standard & Poor’s downgraded the U.S. credit rating for the first time.
S&P cut the long-term debt rating for the U.S. by one notch to AA+ from AAA late Friday. The move wasn’t unexpected, but it comes when investors are already feeling nervous about a weak U.S. economy, European debt problems and Japan’s recovery from its March earthquake.
Speaking on the downgrade issue at the White House Monday, President Barack Obama said the U.S. will always be a AAA-rated country despite what rating agencies say, and he urged lawmakers to work together to tackle the nation’s deficit.
“It tells us investors are panicking,” said Brian Reynolds, chief market strategist with WJB Capital Group, a Wall Street firm that handles trading for hedge funds and mutual funds.
The Dow Jones industrial average was lately down over 400 points, adding to a loss of over 200 points at the start of trading. The mid-morning slump in stock prices came as S&P downgraded the credit ratings of mortgage lenders Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt. source – MSNBC